National Tyre & Wheel (ASX:NTD) expands portfolio

• National Tyre & Wheel (NTD) has boosted its portfolio, completing the acquisition of New Zealand business Carter’s Tyre Service
• Carter’s is the largest independent commercial tyre re-seller in NZ
• The company said NTD and Carter’s were highly complementary businesses
• Total consideration is approximately $28.28 million
• Shares were unchanged at $1.54

Brisbane based National Tyre & Wheel (NTD) has boosted its portfolio, completing the acquisition of New Zealand business Carter’s Tyre Service for a total consideration of approximately $28.28 million.

NTD imports and wholesales tyres and wheels in Australia, New Zealand and South Africa, covering almost all vehicle types and distribution channels. Its subsidiaries include TYRES4U, Black Rubber, Tyreright and Dynamic Wheel Co.

Carter’s is the largest independent commercial tyre re-seller in NZ with a nationwide network of stores in 40 locations, including 23 company owned stores, 11 licensed stores and six agents, as well as two retreading factories.

NTD paid $26.4 million (NZ$28m) and issued 1,394,222 fully paid ordinary shares at an issue price of $1.35 per share. Based on the exchange rate between the Australian Dollar and New Zealand Dollar (of $0.9411: NZ$1) the value of the shares on completion was $1.88 million (NZ$2m).

The acquisition was funded by a debt facility, a $9 million institutional share placement and an underwritten share purchase plan offer to raise $3 million.

When it announced the planned acquisition last month, the company said NTD and Carter’s were highly complementary businesses with a trading relationship extending over almost 25 years.

NTAW, via its wholly owned subsidiary, Tyres4U (NZ) Limited, is already the largest independent commercial tyre wholesaler in NZ and supplies approximately 60 per cent of Carter’s product purchases. In turn, the Carter’s store network accounts for around 40 per cent of Tyres4U (NZ)’s sales.

On the ASX today NTD closed unchanged at $1.54